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143808 - Auto Club Ins v State Farm Ins

Automobile Club Insurance Association,
John A. Lydick
(Appeal from Ct of Appeals)
(Ingham, Draganchuk, J.)
State Farm Mutual Automobile Insurance Company,
Defendant-Appellant/Cross Appellee,
Dale L. Arndt
Allstate Insurance Company,


​In November 2007, a sixteen-year-old girl was injured in a car accident in Ingham County; she died about a month later. She had been living with her mother and uncle in Howell for several months; before that, she had lived for about 1l years with her father in Tennessee. The girl’s parents had divorced in 1994, when she was four years old; the divorce judgment granted physical custody to her father and joint legal custody to both parents, who then lived in Michigan. In February 1995, the Wayne County Circuit Court entered an order permitting the father to move with the child to Tennessee, after he received a promotion there, but the parents maintained joint legal custody.


In the summer before the accident, the girl had enrolled in the Howell Public Schools; her mother submitted a residency affidavit and emergency contact list, both giving her home address in Howell as the girl’s residence. Similarly, while the girl was hospitalized after the accident, her medical and insurance documents, including an application for no-fault benefits, listed the Howell address.


The girl’s uncle had a no-fault policy with Automobile Club Insurance Association; State Farm Mutual Automobile Insurance Company insured the car the girl was riding in at the time of the accident. State Farm maintains that the girl was “domiciled” with her uncle for purposes of insurance company, so Auto Club is responsible for her personal injury protection benefits. Auto Club counters that the girl was domiciled with her father in Tennessee, so State Farm, as the driver’s insurer, should pay.


Michigan’s no-fault statute, MCL 500.3101 et seq., provides that a personal protection insurance policy covers any relatives of the insured person “domiciled in the same household.” MCL 500.3114(1). MCL 500.3114(4) provides “Except as provided in subsections (1) to (3), a person suffering accidental bodily injury arising from a motor vehicle accident while an occupant of a motor vehicle shall claim personal protection insurance benefits from insurers in the following order of priority: (a) The insurer of the owner or registrant of the vehicle occupied.”


Auto Club sued State Farm, but the trial court granted State Farm’s motion for summary disposition and dismissed Auto Club’s claims. The judge held that the 16-year-old was domiciled in Michigan at the time of the motor vehicle accident that resulted in her death; consequently, Auto Club was the priority insurer and was responsible for paying personal injury protection benefits under the no-fault act.


But on Auto Club’s appeal, the Court of Appeals reversed and remanded the case to the trial court, saying that “there was a genuine issue of material fact regarding” the girl’s domicile.


“The question of which insurance policy has coverage in the instant matter revolves around the issue of [the girl’s] domicile at the time of the accident,” the appellate panel explained. “Generally … ‘domicile’ is defined as ‘[t]hat place where a man has his true, fixed, and permanent home and principal establishment and to which, whenever he is absent, he has the intention of returning.’”


“Generally, a determination involving a person’s domicile is a question of fact,” the Court of Appeals noted. “Only where facts are undisputed is domicile a question of law for the court. … [W]e hold that there are genuine issues of material fact that make it inappropriate for the trial court to have properly resolved this issue as a matter of law.”


The appellate panel looked to the Michigan Supreme Court’s decision in Workman v Detroit Auto Inter-Ins Exch, 404 Mich 477 (1979). The Workman court said that, to determine if someone is “domiciled in the same household” as the insured person, a court should consider four factors: (1) the subjective or declared intent of the person of remaining, either permanently or for an indefinite or unlimited time, in the place he contends is his “domicile” or “household”; (2) the formality or informality of the relationship between that person and the members of the household; (3) whether the person lives in the same house, within the same curtilage or upon the same premises as the insured; and (4) whether the person who claims “residence” or “domicile” in the household has another place of lodging.


The panel also cited Fowler v Airborne Freight Corp, 254 Mich App 362 (2002). In that case, the Court of Appeals said other relevant factors include (1) whether the child continues to use the parents’ home as the child’s mailing address, (2) whether the child maintains some possessions with the parents, (3) whether the child uses the parents’ address on the child’s driver’s license or other documents, (4) whether a room is maintained for the child at the parents’ home, and (5) whether the child is dependent upon the parents for support.


“Here, there was extensive testimony regarding the first Workman factor,” the Court of Appeals said. According to the 16-year-old’s sister and mother, the teen planned to stay in Michigan for a year to try to build a relationship with her mother. Around Thanksgiving 2007, not long before the accident, the 16-year-old told her sister that she planned to return to Tennessee around Christmas to live and attend school. The girl’s father also testified there was no intent for her to permanently remain in Michigan; in a Thanksgiving phone call, the girl told her father that she wanted to come back to Tennessee, but he told her she must first finish the semester. The father believed that the girl understood that she could return to Tennessee no earlier than Christmas, and that he probably would have picked her up at that time.


“These circumstances raise genuine issues of material fact related to Sarah’s intentions,” the Court of Appeals declared. “Rather than the facts simply reflecting a hope to return to Tennessee, the facts could just as easily be interpreted as showing a firm intention to return that was stifled only by the fact that Sarah was not legally permitted, because of her age, to act on her intention at that time.”


The second, third, and fourth Workman factors do not favor either location, the panel said. As to the second factor, “formality or informality of the relationship between the person and the members of the insured’s household,” the girl was living with a parent at both locations. When with a parent, she lived in that’s parent’s home, so the third factor was also neutral; as to the fourth factor, there was no testimony about the girl having “another place of lodging.”


“Turning to the additional Fowler factors, we note there was little evidence in the record regarding what address Sarah used for mailing, for forms, or regarding the status of her possessions or finances,” the Court of Appeals said. According to the mother, the 16-year-old not only went to school in Howell, but got a job at a restaurant, was socially active, and was painting her bedroom in the trailer where she lived with the mother and uncle. The mother paid the girl’s expenses while they lived together, including medical insurance, but the father maintained a room for the 16-year-old in his Tennessee home.


“It is clear that the trial court based its decision to grant summary disposition in favor of defendant on its finding that there was ‘no real evidence that [the girl] intended to return to Tennessee to live,’” the appellate panel noted. But the testimony conflicted on this issue, with the mother’s testimony being contradicted by the father and sister, so summary disposition was inappropriate “because a trial court is not permitted to determine facts or assess credibility on a motion for summary disposition.”


Auto Club argued that orders by the Livingston Probate and Wayne Circuit Courts established that the girl was domiciled in Tennessee, but the Court of Appeals rejected that contention: “[T]hose courts did not determine [the girl’s] domicile for the purpose of insurance coverage, and there is no authority that suggests that the trial court was required to adopt the ruling of different jurisdictions deciding the issue for a different purpose for different parties.”


The appellate panel explained, “The probate court was considering a petition for formal probate and a determination of the personal representative, and a petition for funeral arrangements.” Among other matters, the probate court ruled that the girl should be buried in Tennessee and that her father had the right to make decisions about the burial and funeral arrangements. The Wayne Circuit Court was considering an emergency motion, brought while the girl was in a coma after the accident, to change custody. That court initially ordered that the girl’s domicile could not be removed from Michigan, but later set the order aside as “void ab initio.”


“Although [Auto Club] argues that the trial court ignored these orders, it is evident that the trial court considered the transcripts of the probate proceeding, because, as the only substantial testimony submitted in the case, the trial court had to rely on the probate court testimony for its factual findings,” the Court of Appeals noted. “Regardless of the prior proceedings in other courts, this appeal involves review only of the trial court’s independent determination of [the girl’s] domicile for the purpose of no-fault act priorities.”


Both parties appealed. In an order dated March 23, 2012, the Supreme Court granted leave to appeal: “The parties shall [address] whether legal residence and domicile of the insured minor were conclusively established in Tennessee pursuant to the judgment of divorce entered by the Wayne Circuit Court, as amended, or whether the minor had the capacity to acquire a different legal residence or domicile of choice.”